Ad Age takes closer look at TV networks' moves into DS

August 11, 2008 by Dave Haynes

Ad Age did a dip this morning into our little world, detailing how the major TV networks, facing declining revenues, are looking for ways to hang on to revenue by offering new stuff to sell.

Not much new if you have been around this space for a while, but the closing paragraphs offer some insight into the thinking and what it actually means to the big networks and to pure-play digital screen networks.

As these media behemoths ramp up their activity further, they threaten to take share from the smaller companies that have long provided services and ad space in stores and the like. “With the clout of an NBC or an ABC, [clients] are going to do that first,” said Michelle Katz, an activation associate director at Publicis Groupe’s MediaVest. “That’s who the client is comfortable with.”

It’s unclear that success in the out-of-home arena will be rocket fuel to TV-network finances. While extending into nontraditional venues “can’t hurt,” said Michael Nathanson, a media analyst at Sanford C. Bernstein, selling ads on out-of-home screens “will not move the dial, as the network revenue ad base is in the billions. At most this could be 2% to 4% of their base business.”

CBS, which reported second-quarter earnings July 31, said revenue at its outdoor operations rose 8% in the first half of the year, to nearly $1.1 billion, up from nearly $1.02 billion in the same period a year earlier. Revenue from TV operations rose 1% to about $4.8 billion from about $4.7 billion.

Outdoor advertising has shown gains while other media have not. Spending on outdoor advertising rose 4.9% in 2007, to about $4.02 billion, according to TNS Media Intelligence. Ad spending on TV overall, meanwhile, fell 1.7% to about $64.4 billion.

If this sector is to gain more traction in the marketplace, marketers will have to agree on standards of measurement. Does an impression at a gas station equal one at the gym? Does an ad viewed in the back seat of a taxicab have as much power or meaning as one seen in a hospital room? If the Out-of-home Video Advertising Bureau, an industry trade organization, “could pull that off in 20 months, I think that’s pretty impressive. That to me would really be one of the primary milestones,” said NBC Universal’s Mr. French.  

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